Ontario Teachers’ Next Key Markets: Asia, Europe, and Infrastructure

The Ontario Teachers’ Pension Plan is preparing to exploit potential opportunities over the next few years by putting people on the ground where the business is going to take place.

This includes China, India, Indonesia, Australia, Vietnam, and the Philippines—regions Chief Executive Officer and President Ron Mock says are likely to be ripe for further investment in the next few years.

“We plan on growing our European and Asian operations extensively,” Mock said in a statement issued to Reuters. “Asia represents a growth opportunity over the next 10-15 years… you can’t just set up on a dime and take down on a dime when you’re investing in private assets like private equity and infrastructure.”

He noted that the new strategy could see a tripling of headcount in Ontario Teachers’ employers based in Asia and could potentially see the opening of new offices in Mumbai and Singapore.

Regarding its European expansion, Mock said that “London remains, and will remain, our home base for the UK and for Europe.”

He added that he and his team may delegate an additional $8.3 billion into infrastructure and other real assets in the near future. Canadian pensions typically invest heavily in infrastructure, relative to their US peers. Oftentimes they take direct investments in infrastructure assets.

Real assets generated a one-year return of 7.0% for Ontario Teachers’, short of the 8.1% benchmark. It currently has about C$18 billion invested in infrastructure, net, representing approximately 9%-10% of its overall portfolio allocation.

The fully funded pension recently announced a C$1 billion commitment to the National Investment and Infrastructure Fund of India, an investment vehicle that purchases equity capital in core infrastructure sectors in India, with a particular focus on transportation, energy, and urban infrastructure.

Ontario Teachers’ managed approximately $144 billion in assets at the end of 2018 for 327,000 teachers.